Analog versus Digital -- Analog signals are continous waves that can represent an unlimited number of values. Telephone systems use analog-switched lines to provide voice communications. Data communication over analog lines has limited transmission speed. The baud rate is limited because of the narrow bandwidth of voice lines. A modem is required to convert the digital data signals to analog signals, which then need to be amplified over long distances, which can distort the value of the data transmitted.
When analog data is converted to digital data it can be tranmitted over digital signals faster and without distortion. Discreet samples of binary data make up the content of the payload. Digital data is precise, but can never transmit the range of information available with analog.